Harrington's Sort & Cull

So Where Do I File My Whiplash Claim?

John Harrington
By  John Harrington , DTN Livestock Analyst

Just tell me where to forward the medical bills. Workman's Comp? Obamacare? The CME's general liability policy (trading-trauma rider)?

Quick, before I pass out from that fistful of pain pills. Of course, the cost of the neck brace, ambulance ride to the emergency room, and pending physical therapy is small potatoes compared with the destructive cyclone of margin-calls and day-trading losses that roared through cattle futures Friday.

Nevertheless, even as an innocent market-watcher with not a dime in Friday's chaotic game, I intend to be fully compensated for all the pain, suffering, and extreme disorientation caused by bizarre price volatility that seemed both inexplicable and irresponsible.

The opening was a muscle-ripping jaw-dropper. Despite late week uncertainty tied to pending cash business and new on-feed data -- unknowns that should have counseled board caution and discreet trader positioning -- live and feeder contracts immediately collapsed with triple-digit losses. Indeed, the abrupt plunge was even more alarming given the fact that Thursday's live settlement still remained nearly $3 below last week's 5-market steer average.

My phone and e-mail soon blew up, flooded with questions about imploding futures. What was the smoking gun? Had China reversed its openness to U.S. beef? Would the closure of a large Canadian feedlot in early 2017 force more cattle into the U.S.? Did the board's reversal on Thursday signal technical doom?

Such frantic questions laid the miserable groundwork for severe whiplash as my head jerked back and forth between market screen and computer spreadsheet, senselessly spazzing over the crazy assumption that the board only swings for damn good reasons.

But then came the true moment of critical injury, the last-minute shock that snapped my cervical vertebrae like a cheap plastic pop necklace. In the last quarter hour of the session, cattle futures went from sharply lower to no worse than mixed with most issues settling 275 to 447 points above lows of the confusing day.

In all seriousness, I have nothing to complain about. Cattle feeders who sold stock as low as $166 in the middle of this wild mess surely deserve to cut ahead in the complaint line. Who knows? Maybe the cash trade was destined to falter this week even if futures worked like a well-calibrated Swiss watch.

At this point, I have to doubt it.

For more from John see www.feelofthemarket.com

(CZ)

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